Blue chips lead Wall Street to positive territory

By LISA SINGHANIA

Associated Press

NEW YORK – Blue chips led Wall Street higher today, lifting the Nasdaq composite index to its first positive finish this week despite a continuing slide in technology stocks.

Lower oil prices made chemical companies and airlines especially attractive buys to investors looking for less risky investments. However, a profit warning from Dell Computer after the market closed raised the likelihood of a return to the market’s losing streak on Thursday.

Dell fell $2.38 in after-hours trading after warning that it, like other high-profile tech companies, expected to report disappointing earnings. Dell fell 38 cents to $28.19 in regular trading.

During the regular session, the Dow Jones industrial average rose 64.74 to 10,784.48, giving up ground after gaining more than 120 points during the day.

The tech-focused Nasdaq rose 67.27 to 3,523.10 after spending much of the day in negative territory. The gain erased some of Tuesday’s 113-point loss, which left the index at its lowest close since late May.

The Standard &Poor’s 500 index was up 7.86 at 1,434.32.

“I’d characterize the day as a rebound from the oversold levels of yesterday, specifically in tech stocks,” said Bob Streed, portfolio manager for the Northern Select Equity Fund. “This is just a bounce you’re getting in some stocks. I don’t think these gains are sustainable.”

Bargain hunting after the market’s recent weeks of decline prompted much of today’s upturn. Investors, while increasingly anxious about third-quarter earnings reports due out this month, were still looking for good investments.

Buyers were drawn to shares of chemical and airlines stocks, believing that heavily oil-dependent companies will see a reduction in costs as the price of oil falls. A barrel of light, sweet crude traded at $31.43 today, down from nearly $38 last month.

DuPont rose $1 to $45.38 and Dow Chemical was up 31 cents at $27.25. Investors bid Delta up $1.88 to $45.75; Continental Airlines rose $1.38 to $47.

Technology stocks spent much of the day down, but staged a mild recovery after Oracle issued a statement reaffirming a positive earnings outlook.

The software maker itself ended the day down $1.38 at $68.13, but recovered from an earlier loss of as much as $6. The stock fell 12 percent Tuesday.

Bargain hunting also prompted buying in chipmakers, whose stock prices have generally drifted downward. Intel rose $1.69 to $42 and Micron Technology was up $3.94 to $47.

Among stocks that issued bleak earnings announcements, Knight Trading fell $3.69 to $28.50. Investors, however, bid Computer Associates up $3.63 to $28.06 after it said late Tuesday that earnings would be below Wall Street estimates.

Old-economy stocks got most of the attention. Boeing was up for a second day, rising $1.25 to $61.13. International Paper climbed $1.88 to $31.50.

AT&T rose 63 cents to $29.75 on published reports it may spin off its struggling consumer long-distance business. BellSouth was up $1.94 to $42.94 and SBC climbed $1.69 to $51.63 after the companies said they would make a major announcement Thursday.

“When times get a little uncertain, the older names that are sustainable growth companies or value companies … come to mind for investment allocation,” said A.C. Moore, chief investment strategist for Dunvegan Associates in Santa Barbara, Calif.

Declining issues outnumbered advancers by a 13-to-10 margin on the New York Stock Exchange. Consolidated volume came to 1.39 billion shares, ahead of the 1.31 billion shares in the last session.

The Russell 2000 index rose 2.82 to 507.49.

Overseas, Japan’s Nikkei stock average rose 1.49 percent. Germany’s DAX index fell 0.57 percent, Britain’s FT-SE 100 was off 0.16 percent, and France’s CAC-40 fell 1.63 percent.